PMI Raises Full-Year EPS Guidance on Strong Q3 2025 Performance

Philip Morris International (PM.US) reported strong financial results for the third quarter of 2025, with adjusted diluted EPS growing by 17.3% to $2.24, surpassing analyst estimates of $2.1. Total net revenues increased by 9.4% to $10.8 billion compared to the third quarter of the previous year. This robust performance was primarily driven by significant growth in the smoke-free business and effective pricing strategies, contributing to an overall positive financial quarter.

Strong Smoke-Free Business Performance

PMI's smoke-free business (SFB) was a key driver of growth, accounting for 41% of total net revenues and over 42% of total gross profit. Shipment volumes for smoke-free products rose by 16.6%, with net revenues growing by 17.7% (13.9% organically) and gross profit increasing by 19.5% (14.8% organically). This segment's strong performance was highlighted by IQOS gaining 0.9 percentage points of combined cigarette and heated tobacco unit (HTU) industry volumes, reaching a 9.1% share, and VEEV e-vapor shipment volumes growing by 91.0%.

Oral smoke-free product shipments also saw significant increases, with nicotine pouches more than doubling outside the U.S. and Nordics, and growing by 37% in the U.S. to 205 million cans. ZYN accelerated its offtake growth to 39% in Q3, fueled by commercial activities and 'relaunch' promotions following supply constraint reductions. These results underscore the successful expansion and profitability of PMI's smoke-free portfolio.

Management Raises Full-Year Guidance

Building on these strong results, PMI's management raised its full-year adjusted diluted EPS guidance, now projecting a range of $7.46 to $7.56 for 2025. This revised forecast represents a projected increase of 13.5% to 15.1% over the adjusted diluted EPS of $6.57 in 2024. The company expects total cigarette and smoke-free product shipment volume growth of around 1%, driven by 12% to 14% growth in smoke-free product volumes.

Management also anticipates net revenue growth of approximately 6% to 8% on an organic basis, with organic operating income growth projected between 10% and 11.5%. These optimistic projections are supported by the continued strong performance of the smoke-free business and strategic investments in its expansion. The company also announced plans to implement an evolved organizational model effective January 1, 2026, with new segments: International Smoke-Free, International Combustibles, and U.S., designed to enhance agility and support its smoke-free future.